Is a Corporate Seal a Requirement?

For almost every single situation, the answer to the above question is no. Although both a corporate seal and official stock certificates were once required for corporations, like spurs on a boot, these remnants of the past are no longer functional or relevant. States still generally recognize the legal power of a corporate seal and official stock certificates, however, modern technology and practicality has led the diminishment of these powers and ultimately, the corporate seal and official stock certificates may end up becoming merely symbolic gestures by a corporation.

Corporate Seal

Similar to a state seal, the corporate seal was the official mark of the corporation. Since a corporation is considered a separate entity, the corporate seal acted as the signature of the corporation. Any legal or official document that emanated from the corporation required a corporate seal. Individuals were not allowed to authorize certain corporate acts and so a corporate seal was necessary to prove corporate authority. However, as business became more fluid and as technology ushered in the digital age, the corporate seal became obsolete and to a certain extent, a hindrance. Today, a corporate seal may be used for deeds and for bank accounts, but even these uses of the corporate seal are becoming more and more rare. Rather than a corporate seal, state laws recognize the signature of an individual(s) with actual authority (i.e. CEO, director) as binding upon the corporation.

Corporate seals in the past were imprinted on wax upon a document. As time passed, rubber stamps were preferred and today, most corporate seals are embossed upon a document. Although no longer required, the corporate seal still retains a sense of authenticity and a mark of identity for a corporation.

Official Stock Certificate

Official stock certificates have also lost some of their value and power over time. Official stock certificates were originally used as title to a corporation's stock and issued to all stock holders. Made official by the corporate seal, these certificates were necessary to show proof of ownership of corporate shares. Today, the onset of brokers and electronic filings has made official stock certificates unnecessary. State corporation laws have done away with requiring corporations to issue paper stocks, and as a result, many publically traded corporations no longer issue paper certificates and have transitioned to electronically filing all corporate shares. Stock certificates are no longer considered title, but merely evidence of title and courts will generally recognize the corporation's stockholder register as the official record of true shareholders. Like the corporate seal, official stock certificates are no longer required, but the certificates still provides an aura of authenticity, although the effects are purely psychological and not legal.